Figure 14-13 Suppose a Firm in a Competitive Industry Has the Following

question 305

Multiple Choice

Figure 14-13
Suppose a firm in a competitive industry has the following cost curves:
-Refer to Figure 14-13. If the price is $3.50 in the short run, what will happen in the long run?

• A)Nothing. The price is consistent with zero economic profits, so there is no incentive for firms to enter or exit the industry.
• B)Individual firms will earn positive economic profits in the short run, which will entice other firms to enter the industry.
• C)Individual firms will earn negative economic profits in the short run, which will cause some firms to exit the industry.
• D)Because the price is below the firm's average variable costs, the firms will shut down.

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Definitions:

Multicultural Organization

An organization that values diversity and integrates various cultural perspectives into its operations, aiming to create an inclusive and equitable working environment.

Characteristics

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Organizational Learning

The capacity of an organization to acquire, improve, and transfer knowledge within itself, thereby adapting to new conditions and challenges.

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Diversity in the workplace refers to recognizing and valuing difference across various dimensions such as race, gender, age, sexual orientation, and religious beliefs, among others, to build an inclusive and equitable work environment.